Honestly, before I didnt care about daily deal sites, but these days I heard my friends talk a lot about them. Thus, I did some research about this topic. It s quite interesting! :D
The spread of daily deal sites has been significantly increasing and penetrated the small business world. There are a number of leading daily deal sites including Groupon and Living Social which have attracted millions of shoppers around the world.
There are few questions we need to consider:
- How can small businesses run an effective daily deal and reduce risk?
- Are they better off avoiding daily deals sites altogether?
- Groupon: Last year,Groupon entered the Australian market and is now operating under the StarDeals.com.au. Groupon allows consumers to signup for coupon offers from local businesses. If a set number of Groupon users signup for a particular coupon, the customers are granted the coupon. Groupon charges a cut of the coupons sold, and the businesses get increased exposure and potential new customers. Of the daily deals sites, Groupon has the widest range of discount offers.
- LivingSocial: Living Social works similarly to Groupon, with consumers able to register in a specific city or market. Living Social has a greater number of household and personal care offers than other daily deal sites and has a dedicated section for travel getaways.
- CuDo: Every day, Cudo emails you an exciting experience packed full of value from handpicked businesses. Things like day spas, salons, hotels, restaurants, theater tickets, tours, holidays and much more. You experience them daily, or whenever you choose.
If these deals can be done correctly with the right type of business, they can be very effective. In other words, when local merchants runs daily deals, shortly there will be an effect on their online reputation.
Through using search tools, these deals can be browsed and selected. Moreover, the link is also provided to direct back to their websites. However, the thing needing to be considered here is the effect to their online reputation. Consumers who seek and purchase these deals are often the most active online and in social media channels. This can be good or bad, depending on their experience. If local businesses effectively take care of these customers, they are more likely to post on Facebook, Twitter and Google Places and share their opinions about how they experienced.
However, there are many problems related to these daily deal sites. For instance, when these deals have been taken, many shoppers still don't know how to redeem due to unclear instructions on these sites. They also have problems with the quality of customer experiences. Additionally, a lot of people got trouble with the payment systems of these sites. Then, these users go online and write negative reviews, which can then really damage local merchants' reputation. Therefore, here are a few tips for running effective daily deal sites including Groupon, Living Social and CuDo
- If you run a daily deal, you must plan for and anticipate how to handle a big increase in volume on a short term basis to insure a great customer experience. Line up short-term staff to come help in case you need them. On most sites, you can put a cap on the number of coupons sold. This can help prevent you from being overwhelmed.
- Negotiate! There are millions of these "Daily Deal" sites today so don’t just try the first one that calls you. Be sure to shop around and do your homework. Furthermore, you should choose some daily deal sites which have a good reputation/ high credibility.
- It would be great if you can provide a clear instruction to help customers know how to redeem their coupons in order to avoid the confusion. Ask customers when they come in to present coupons upfront. This will ensure you know about them ahead of time. We all know that it’s hard to take special care of customers that are paying 1/3 the price, but these are likely to be the critics of today. You have to take care of them.
- To redeem, ask them to provide an email address to send them other deals in the future. Tell them they can opt-out after getting the first email. However, you need a digital way to create a relationship with that customer to encourage future visits.
- Setup an online review management service to track what people are saying. You need a social media monitoring service like chatmeter to monitor the response and track all of the online reviews. Chatmeter notifies you of all new online reviews and social media mentions every day, so your just one click away to responding.
- Respond to all customer comments, good or bad. If you receive any negative reviews, try to invite them back when business is back to normal, most people would understand the circumstances. If positive, say Thank You. This helps your online reputation and shows the business cares and will drive loyalty and word of mouth, which is crucial for any business to thrive.
What do you think about these daily deal sites? any experience?
Please feel free to share your comments :D
I am not sold on them and actually know the owner of one of them personally and the future of these sites is limited. Not only as a result of limited clients, but these companies are only just breaking even.
ReplyDeleteMany small businesses have gone broke after running an offer and not being able to cater for the vast number of vouchers sold.
I receive emails from all these companies on a daily basis and the offers really are incredible but it does make me question their viability and benefit for small businesses.
Hi Kate, thanks for your comment.
ReplyDeleteI agree with you that a lot of merchants lost their money on the promotion, and some of them are not sure whether they will continue to run another daily deal in the future.
Interestingly, there are still many types of consumers who are seeking and willing to spend a lot of money on daily deals. For example, there are some individuals who actively collect information about many kinds of products, places to stop and technologies. These people use this knowledge for discussions and information sharing to others. It can be said that they are likely to purchase and use daily deals and check their email for daily deals every day. Furthermore, there are many heavier daily deal shoppers who don’t really care about their finance. Additionally, there are a lot of shoppers who only concern with getting things at a low price, so it is hard to predict their number of daily deal purchases. There are also plenty of reasons why people like to purchase daily deals more than just trying to get deep discount. By the way, I think that local merchants can survive only if they are able to manage the balance between their welfare and consumer savings :D
I have a very recent example. Firstly, I am not sold entirely either, I think they have the ability to sell something quickly, but their long term impact is quite limited. Example. A friend of my wife's bout a day spa for $48 which is usually worth $290. That is an insane saving. She found out the day before she was booked to go that she needed to go overseas for work the next morning and therefore couldn't go. So she offered the spa thing to my wife. My wife loved it, but came back saying that she would never pay $290 for it. So, with her new phone that has the ability to sign up to these sort of deals, my wife is now signed up to a number of these sites with the idea of simply bargain hunting. She doesn't care what her finds do to small businesses, because to her as a consumer, she just finds good deals. Which is great, but they will not convert her to a loyal customer.
ReplyDeleteRoss
I think that @Ross has hit the nail on the head... these deals don't create loyal customers... they only cater for the bargain hunters. If the prices isn't exceptionally low, then the offer won't succeed.
ReplyDeleteNegative publicity over recent weeks has also hurt the reputation of these sites.
I feel that their future is limited.
Keep the great posts coming!
I think daily deal sites offer a way for marketers to acquire new customers. Marketers benefit from them by learning which customers are drawn to which of their products and services. Based on such information,they can build meaningful relationships and thus gain loyal customers. I believe that if these daily deal sites can overcome the problems they are currently facing, they would be able to grow more and gain more in this affiliate marketing industry.
ReplyDelete@all: thanks for all your comments
ReplyDeletewell, it is hard to say now :D. Honestly, I still have a hope on those daily deal sites. If they are able to change their current business model, they can find the way out. For example, they shouldn't focus too much on deep discounts, but they should establish a team to track customers' purchasing behavior on those sites. The thing I'm trying to say here is that the team can help to categorize who are profitable customers in order to engage with them and make them become loyal customers....
by the way I do appreciate all your comments :)
Thank you :)